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On May 13, 2014, the IRS posted new frequently asked questions (FAQs) addressing various areas affecting employer-sponsored health plans, including the employer mandate, seasonal worker coverage, minimum value and small business tax credits.

Of specific interest are clarifications for the requirements that non-calendar-year plan sponsors must comply with in order to ensure that such plans are eligible to delay compliance with the employer mandate requirements until the first plan year beginning in 2015 (FAQ 30). A new FAQ (54) also clarifies the two separate definitions that apply for purposes of "seasonal workers" and how each definition is important to understand in the appropriate context. One definition is used for purposes of determining if the employer is large enough for the employer mandate to apply, while a completely separate definition is used for purposes of determining whether coverage must be offered to the seasonal worker.

Finally, the IRS posted two FAQs addressing the consequences an employer will face if it does not maintain its own group health plan, but instead decides to reimburse employees for premiums they pay for individual policies purchased either inside or outside the marketplace. Consistent with previous guidance, these FAQs reiterate that this practice is explicitly prohibited as explained in IRS Notice 2013-54. The penalties for such actions can be as high as $100/day per employee ($36,500 per year, per employee). Employers are highly discouraged from pursuing any strategy that provides pretax reimbursements for individual policy premiums.
Source: Compliance Corner, NFP 

The Human Resources and benefits arena has become much more regulated over the years and CGI has been able to assist clients by keeping them informed of changes in the legal landscape. Contact us at for more information about Human Resources support and compliance services.

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